First MN Racino Hearing April 26

Wouldn’t you know it? The first hearing scheduled on the “Racino Bill” is being held on Tuesday, April 26 and I’ll be at 32,000 feet or thereabouts on my way home from spending Easter weekend with my two younger sons in Nevada. Thankfully I know from my experience on Capitol Hill another lifetime ago, initial hearings are not usually very substantive. There will be the parade of witnesses on why the bill is a good idea and a parade of witnesses on why the bill is not a good idea. All will read from prepared remarks and will submit those remarks for the record – which is where I’ll be able to chew on them once they are transcribed and posted.


I have not seen a witness list yet, but I’m hopeful that one will be out before the hearing date, though I assume we will see a representative from Canterbury Park, Running Aces Harness Park, the Minnesota Indian Gaming Association, an anti-gaming group and perhaps even a few Tribal chairpeople, though perhaps not. I would think the Lottery, slated to run this operation, could be involved as well.

Where the “pulse”, if you will, of the legislature will be able to be ascertained will be in the question and answer period. Depending upon where the softball questions are directed and where the more rigorous questions are directed, we will be able to have an idea of where this bill is heading.

There are rumblings that one side or the other is going to try and stack the spectator area but whatever happens in that regard, take it from me, the legislators and their staffs know what’s real and what is being manufactured. I remember being a staffer in the US House of Representatives back in the late 1980’s and attending a hearing on acid rain. It was apparent that the United Auto Workers had stacked the grandstand with members to show the overwhelming opposition to any kind of environmental protection legislation. You think that we on the Hill didn’t see through that? Of course we did and so will the legislators in St. Paul.

Ultimately this bill will move to victory or defeat based on the merits and the way it is shaped as it makes its way through the legislative process. The bill you see now may be very different than the one you will see should it make it to the floor of the State House and Senate. The mark-up sessions will be the ones to watch as Representative s and Senators add and subtract to the bill through the amendment process. In golf they say that you “drive for show and put for dough”; in the legislative process, these initial hearings are for show, but the amendment process will be where the “dough” is – where the bill will sink or swim.

Racino Bill in Play in Minnesota

As those of you that follow this blog know, I had recused myself from any mentions of the Racino legislation here in Minnesota because of my position at IGT and a possible conflict with the Tribes I serviced here. Interestingly enough, right about the time I was laid off a former customer complained about me just owning a racehorse is a conflict of interest. If he had bothered reading more than the one post highlighted by Racino Now in on their website (in which I did not mention the racino at all, by the way) they would have seen that I was adamant in the past about making sure I stayed very clear of the issue. Even now, I am planning on being as fair and unbiased as I can be but it’s become apparent that without the conflict of interest in my way I cannot write a blog covering our horses and Minnesota racing and not mention the racino bill.


On March 21, Sen. Dave Senjem (R-Rochester) introduced the latest incarnation of the racino bill. If by that you infer that this isn’t the first time around the block for this type of legislation, you inferred correctly. This would be try number six, if I’m not mistaken. The difference this year? Primarily that the beneficiary of the funds would not be a Vikings’ stadium, education or the general fund but earmarked for the Minnesota Future Fund to be run by the Department of Employment and Economic Development. Don’t know it? It’s because it doesn’t exist yet. DEED will be charged with investing that money in Minnesota businesses to create jobs. According to bill cosponsor Sen. Claire Robling (R-Jordan), “General fund money is short right now, but the best way to get that fund back is jobs, and that's what we need.”

The value to the racing industry is obvious. Higher purses which would lead to more horses coming north to race and being bred in the state thereby stimulating the supporting agricultural based industries like feed and hay suppliers. The industry itself would draw more stables north for the summer with the attraction of higher purses. More horses mean more trainers, grooms, blacksmiths, veterinarians all paying taxes, renting rooms, buying food and generally supporting the regional economy around the Twin Cities. As owners, we too would benefit if we are able to finish in the money enough. The possibility of actually breaking even or making money now becomes more realistic for all involved.

There is, of course, opposition to the bill. For more than a decade, Native American Tribes have owned a monopoly on gaming in the state, operating 18 casinos around Minnesota and they are actively opposed to the expansion of gaming. John McCarthy, Executive Director of the Minnesota Indian Gaming Association, told the St. Paul Pioneer Press that there should not be an expansion of gaming in a mature market. Ultimately what it is would be a threat to their monopoly, mostly in the south (Mystic Lake, Little Six, Treasure Island) as well as to the Milles Lacs Band of Ojibwe’s facility, Grand Casino Hinckley, whose access to Twin Cities’ traffic going north would be interrupted by Running Aces Harness Park.

A lot is going to need to be worked out to get a bill passed and signed. What percentage of the revenue goes to purses, the state, the track owners? Who will buy the machines? How will the licenses be granted? What about the economic impact to the Tribes (you can say it doesn’t matter, but when they start laying people off…it’ll matter)? I don’t see Fortune Bay or Grand Portage Casinos being affected one iota by this plan, but you can bet that the casinos I mentioned above would be affected in some way shape or form. Is there any way to mitigate that or should there be at all? Should it be all about competition and capitalism?

I can see both sides of the issue and, in a future post, I may elaborate on a win/win for both parties that a friend of mine and I talk about quite a bit over coffee, but that’s for another time. The groups of folks that I cannot identify with are the wailers about how expanded gaming is the death knell for society. Casino gambling exists in Minnesota already in a big way. Additionally, the gaming expansion being proposed is for facilities that already allow gambling – horses AND card based gambling. No one is reinventing the wheel here, so please put away the holier than thou sanctimonious arguments about the end of the world as you know it. It’s not. If you don’t want to participate in it, don’t go, but don’t claim that it’s ruinous to have gambling where there is already gambling.

I plan to attend as many of the hearings on this bill (and any others should they pop up) as I can and I’ll let you know what I see and hear as well as my impressions on the issue as things develop.